PSC takes action on FPL ethics issue

Delayed examining rate increase request

BILL KACZORAssociated Press Writer

Published Tuesday, August 25, 2009

TALLAHASSEE, Fla. (AP) -- Utility regulators removed a top staffer from all Florida Power & Light Co. cases on Monday pending an investigation of his attendance at a social function hosted by a FPL executive.

The Public Service Commission delayed the start of hearings on FPL's request for a rate increase for about two hours after Commissioner Nathan Skop raised the issue.

Ryder Rudd, director of the panel's Office of Strategic Analysis and Governmental Affairs, had told at least three of the five commissioners over the weekend that he and his wife had attended a Kentucky Derby party in May at the home of FPL Vice President Ed Tancer in Palm Beach Gardens.

Skop said Rudd should resign.

"Such inexcusable conduct undermines the public trust and confidence in the regulatory process and impugns the integrity of this commission," Skop said. "These are not allegations, but admissions by this employee."

Skop said he had discussed the matter with the commission's executive director, Mary Andrews Bane, and she disagreed it was a conflict of interest that potentially violated commission regulations and state law.

Commissioner Nancy Argenziano said she'd received a similar call from Rudd, but Chairman Matthew Carter said he had not.

"I have no knowledge of this," Carter said. "I'm caught flat-footed."

Another commissioner, Katrina McMurrian, said she had a voice message on her cell phone from Rudd but had not yet listened to it because her battery died.

The panel then recessed for nearly two hours to individually discuss the matter with staffers before ordering Rudd off all FPL cases pending an investigation by the commission's inspector general. That action was recommended by General Counsel Patrick L. Imhof.

"There are appropriate internal processes that need to be followed and will be followed," Imhof said. "Apparently there is no impediment to the rate case moving forward at this time."

Rudd did not immeidately return a call from The Associated Press seeking comment but told the Miami Herald-St. Petersburg Times Tallahassee Bureau that he only briefly attended the party and didn't think it was a conflict because he had no role in the rate case.

"It was a good opportunity to meet people who are pushing some of the issues I'm following," Rudd said.

FPL is seeking a 31 percent increase in base rates that would raise $1.3 billion a year starting in January. The utility says it needs the additional money to improve fuel efficiency and generate cleaner energy. Company officials also note the rates have not been increased since 1985.

The company also has filed a separate case seeking commission approval for a $1.6 billion, 280-mile natural gas pipeline from north Florida to Palm Beach County.

Both requests have drawn opposition.

A competitor, Florida Gas Transmission Co., said the pipeline unnecessarily duplicates its own facilities.

Kelly, instead, wants the commission to cut FPL's rates by $355 million, which would save $3 a month for customers using 1,000 kilowatt hours, which is about average, said Associate Public Counsel Joseph McGlothlin.

The FPL proposal would increase the base rate by $12.40 for 1,000 kilowatt hours. FPL officials said that would be more than be offset by a separate proposal to cut fuel costs, resulting in an overall rate reduction of about $9 to $100.41.